07/02/13
Despite being up 174-points in early trading, the 5-day streak of triple digit moves in the Dow (on a closing basis) ended yesterday as the indices closed well off their highs. The Dow ended the day up 65-points, but closing 109-points off the high was obviously a disappointment for the bulls. [TABLE="width: 88%, align: center"]
[TR]
[TD="width: 305"]
[TD="align: center"] Daily TSP Funds Return[TABLE="width: 153"]
[TR]
[TD="align: right"] G-Fund:[/TD]
[TD="align: right"] +0.0050%[/TD]
[/TR]
[TR]
[TD="align: right"] F-fund:[/TD]
[TD="align: right"] +0.03%[/TD]
[/TR]
[TR]
[TD="align: right"] C-fund:[/TD]
[TD="align: right"] +0.55%[/TD]
[/TR]
[TR]
[TD="align: right"] S-fund:[/TD]
[TD="align: right"] +1.26%[/TD]
[/TR]
[TR]
[TD="align: right"] I-fund:[/TD]
[TD="align: right"] +1.04%[/TD]
[/TR]
[/TABLE]
[TABLE="width: 80%, align: center"]
[TR]
[TD="align: right"] [/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/TABLE]
The small caps did hold onto more of their gains with the S-fund closing up 1.26%. The late sell-off also allowed the I-fund to keep a 1.04% gain, but much of that may be given back tomorrow as payback (negative fair value.)
In early, emotional, Monday morning trading, the S&P 500 ran right up to the old rising support line, but could not make any more progress the rest of the day. We have expected the old support to act as resistance, just as it did in 1987, but that's just classic technical analysis. The negative reversal day potentially sets up some downside action in early trading on Tuesday.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The S&P 500 closed above the 50-day EMA yesterday, but below the 50-day SMA (simple moving average).
The longer support holds, the stronger the resistance is once the support is broken. This longer-term chart shows the 7-month long support line, and it has now been tested twice from below, and has held so far.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
The Nasdaq 100 ETF, the QQQ, nearly filled an open gap yesterday. It just barely closed above the 50-day EMA, but the negative reversal day puts immediate pressure on it to hold above it in early trading today.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
This is a holiday week so we can expect some light volume, and possible unpredictable action. Add to that the jobs report on the Friday after Independence Day, and it will be very interesting to see where we end the week.
As we know, investors are focused on the Fed so I'm not sure the reaction to the jobs report will be all that predictable. Do investors still want bad news so that the Fed has a reason to continue its aggressive bond buying? Or would they prefer to buy on a strong report that indicates growth in the economy? The latter might give the Fed to lighten up on the bond buying, so you see the dilemma.
Administrative Note: Starting this week, we have a new service for you. Don't worry, it's free for a while. Some of you may know our forum member Coolhand, who has been posting and writing blogs in the forum for us for nearly 9 years. He has started a weekly report in the premium service area, which is and available to everyone who has created a premium service login. You will have to login to view the reports.
At some point in the future, and we are targeting January 2014 as the start date, "Coolhand's Market Analysis" will become a full service, daily subscription based premium service. If you don't have a login to the premium area yet, here is how to create one: Create Account. If you need help, please read FAQ #1... How do I sign up? or watch this quick instructional video. If you have an account, just login - www.tsptalk.com/members.
Also: The Ebbchart Premium Service will retire at the end of July so we won't be taking any new subscribers, or renewing monthly subscriptions come July 1. All current subscribers will have access through July 31, but we won't be charging any more renewal payments.
I want to thank ebbnflow for his years of dedicated reports and service. It has been a pleasure working with him. He is moving onto another endeavor and I wish him the best of luck!
Thanks for reading! We'll see you back here tomorrow.
Tom Crowley
Posted daily at TSP Talk Market Commentary
The legal stuff: This information is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this data. Do not buy, sell or trade the funds mentioned herein based on this information. We may trade these funds differently than discussed above. We use additional methods and strategies to determine fund positions.
